Renewables attract R192.6 billion of investment for SA

07 October 2015, Johannesburg – The renewables sector has attracted R192.6bn in investment, of which 28% (R53.2bn) is much-needed foreign investment, a report by the Department of Energy (DoE) shows.

The State of Renewable Energy in SA report, which was released at the SA International Renewable Energy Conference (SAIREC) this week, explains that SA is well on its way to achieving a goal of 30% clean energy by 2025.

“We’re making intelligent use of our natural advantages,” said Energy Minister Tina Joemat-Pettersson. “Renewables are a massive success story for South Africa.”

The report comes as a Bloomberg study revealed on Tuesday that wind power is now the cheapest electricity to produce in Germany and the UK, even without government subsidies. “It’s the first time that threshold has been crossed by a G7 economy,” reported Bloomberg.

In addition, a panel member at the SAIREC said on Tuesday that the cost of new build for solar and wind energy is the same as building a coal power station. Tobias Bischof-Niemz, chief engineer at R&D Core, said that means “business sense can (now) drive the decisions”.

Load shedding sparked renewable revolution
Renewables were catapulted to prominence in South Africa when electricity shortages in 2008 led to load shedding, leading to bold targets in the 2010-2030 Integrated Resource Plan for 17 800 MW of new power generation capacity from renewables, the DoE report states.

South Africa has already committed to 6 236 MW of renewable energy generation by 2019. Another 6 000 MW will be procured from 92 independent producers, with 37 having started commercial operation, adding 1 860 MW to the grid.

The sector has contributed to over 109 000 construction jobs and cut about 4.4 million tonnes of carbon dioxide.

Prices of renewable energy are falling fast, with the average tariff per kWh having dropped 68% since 2011. Prices are now level with the lowest tariffs in global market leader Germany, according to the report.

Local communities win big

Local communities have been big beneficiaries, with a shareholding of 10.5% in renewable projects, more than four times the required minimum of 2.5%, the report showed.

“A total of R19.1bn has been committed to socio- economic development initiatives in these communities,” the report showed. “The total projected value of goods and services to be procured from BBBEE suppliers is more than R101bn.”

The renewables sector could create up to 462 000 jobs, with more than 25 000 jobs already created, the DoE report said.

Future of renewables
A DoE solar energy technology road map estimates that by 2050 about 70 GW of power can be generated from solar photovoltaic and concentrated solar power sources.

About 247 MW of small scale hydro power could be developed in rural Eastern Cape, Free State, KwaZulu-Natal and Mpumalanga. Work has also begun on a national biomass action plan, it explained.